Which tax rises could the Labour government introduce in the autumn budget?
There’s going to be “a lot of bad news” in the chancellor’s autumn budget – which the prime minister has said will be “painful”.
Speaking from Downing Street, Sir Keir Starmer said the public will have to “accept short-term pain for long-term good“.
Sky’s economics and data editor Ed Conway heard there was going to be “a lot of bad news” in the fiscal event as the government continues to remind voters about its financial inheritance from the Tories, with borrowing at levels not seen since the pandemic.
Rachel Reeves’s first budget on 30 October will be “quite miserable”, Conway has said – with spending cuts and tax rises both expected.
The latter is something Ms Reeves herself has admitted will be on the cards, though Sir Keir vowed in its election manifesto that income tax, national insurance, and VAT wouldn’t budge – remaking the pledge in August.
With that in mind, Sky News looks at which ones could be targeted.
Inheritance tax
This is one of the taxes most likely to be changed.
Inheritance tax is charged at 40% on the value of an estate above £325,000 when someone dies.
The tax rate could be increased, or the value people have to pay inheritance from could be lowered to raise money.
There are currently several exemptions, including on agricultural land and family businesses, but these could be lifted to include them.
The government could also reduce the number of years allowed when giving away assets before someone dies before inheritance tax kicks in.
A leaked recording from March revealed now chief secretary to the Treasury, Darren Jones, saying inheritance tax could be used to “redistribute wealth” and address “intergenerational equality”.
Please use Chrome browser for a more accessible video player
Will Labour raise taxes?
Capital gains tax
Capital gains is imposed on the profit from the sale of capital assets, including second homes, shares, business assets and most personal possessions worth £6,000 or more, apart from cars.
Currently, people do not have to pay tax on the first £3,000 of profits, or £1,500 for trusts.
The minimum limit could be removed and the tax could be imposed on assets currently exempt.
Like inheritance tax, it is one of the taxes that is being most talked about to be targeted.
Read more:
Rachel Reeves says ‘more difficult decisions to come’
Chancellor says Jeremy Hunt lied about UK’s finances
Keep up with all the latest news from the UK and around the world by following Sky News
Council tax
In the leaked recording from Mr Jones, he said he was frustrated by the “out of date” council tax system and hinted homes worth over £1m may have to pay more.
Former shadow minister Jonathan Ashworth told Sky News during the election campaign that Labour would not change council tax bands.
Council tax is currently set in bands that are based on the 1991 value of homes, which has been branded “absurd” by the Institute for Fiscal Studies (IFS) and “incredibly poorly designed” by the Institute for Government “(IfG).
Gemma Tetlow, chief economist at the IfG, said council tax could be reformed “in a very sensible way… rather than having the banded system you could move to something that is much more proportional tax on land revenue”.
She added: “You could do that sensible structural reform and raise some extra money at the same time.”
Please use Chrome browser for a more accessible video player
Labour ‘rolling the pitch’ for tax hikes
Business rates
Labour are understood to be consulting on changing business rates, which are charged on most non-domestic properties with relief for some including small businesses, retail, hospitality and leisure properties.
A change could be made so they are related to the value of the land instead of the current rateable value, which is an estimate of how much it would cost to rent that property for a year in April 2021.
Pic: iStock
Stamp duty
Stamp duty is paid on the cost of a property over £250,000, with more paid for second homes and by non-UK residents, and relief for first-time buyers.
It currently discourages people from moving home and is part of the reason older people are not moving out of expensive, larger properties.
Labour could change the tax so it is focused on annual land value tax instead of on a transaction – but that could be a hard sell with the party.
The deal was announced in response to the White House’s recent policy strategy to make the United States the AI capital of the world.
Nomura’s crypto arm gains regulatory green light in Dubai to offer institutional OTC crypto options, expanding the UAE’s footprint in global digital derivatives.
Safeguarding minister Jess Phillips has told Sky News that councils that believe they don’t have a problem with grooming gangs are “idiots” – as she denied Elon Musk influenced the decision to have a national inquiry on the subject.
The minister said: “I don’t follow Elon Musk’s advice on anything although maybe I too would like to go to Mars.
“Before anyone even knew Elon Musk’s name, I was working with the victims of these crimes.”
Politics latest: Starmer responds to report suggesting tax rises needed
Elon Musk. Pic: Reuters
Mr Musk had called Ms Phillips a “rape genocide apologist” in one of a series of inflammatory posts on X in January and said she should go to jail.
Mr Musk, then a close aide of US President Donald Trump, sparked a significant political row with his comments – with the Conservative Party and Reform UK calling for a new public inquiry into grooming gangs.
At the time, Ms Phillips denied a request for a public inquiry into child sexual exploitation in Oldham on the basis that it should be done at a local level.
But the government announced a national inquiry after Baroness Casey’s rapid audit on grooming gangs, which was published in June.
Asked if she thought there was, in the words of Baroness Casey, “over representation” among suspects of Asian and Pakistani men, Ms Phillips replied: “My own experience of working with many young girls in my area – yes there is a problem. There are different parts of the country where the problem will look different, organised crime has different flavours across the board.
“But I have to look at the evidence… and the government reacts to the evidence.”
Ms Phillips also said the home secretary has written to all police chiefs telling them that data collection on ethnicity “has to change”, to ensure that it is always recorded, promising “we will legislate to change the way this [collection] is done if necessary”.
Read more:
Chancellor warned ‘substantial tax rises’ needed
Minister admits UK-France migrant returns could be ‘frustrated’ by legal challenges
Operation Beaconport has since been established, led by the National Crime Agency (NCA), and will be reviewing more than 1,200 closed cases of child sexual exploitation.
Ms Phillips revealed that at least “five, six” councils have asked to be a part of the national review – and denounced councils that believed they don’t have a problem with grooming gangs as “idiots”.
“I don’t want [the inquiry] just to go over places that have already had inquiries and find things the Casey had already identified,” she said.
She confirmed that a shortlist for a chair has been drawn up, and she expects the inquiry to be finished within three years.
Ms Phillips’s comments come after she announced £426,000 of funding to roll out artificial intelligence tools across all 43 police forces in England and Wales to speed up investigations into modern slavery, child sex abuse and county lines gangs.
Some 13 forces have access to the AI apps, which the Home Office says have saved more than £20m and 16,000 hours for investigators.
The apps can translate large amounts of text in foreign languages and analyse data to find relationships between suspects.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike